The Struggle for Independence in Catalonia, Spain

Over 10% of all bank assets in Spain consist of bad loans, a major impediment to economic recovery. The total value of the bad loans, mostly mortgages gone sour, equals 182 billion euros, about 17.4% of total Spanish GDP. This causes banks to resist additional lending until they clean up their books. It’s not clear business are actually seeking more loans right now, given the 25% unemployment and collapse in retail sales.

The economy, in short, is a mess. And this explains the movement in one of the better-off regions, Catalonia, toward independence. A vote this week in the region will go a long way to determining that reality.

“If we were a European state we would be seventh in Europe in per capita income, after Denmark and Sweden,” the Catalan nationalist and regional government minister declared, to an enthusiastic response. His figures are based on wealth calculations that can look skewed. (Struggling Ireland is, for example, richer on a per capita basis than thriving Germany). But they are seen here at least as proof that Catalonia – a region of almost eight million people – could be not just viable but also wealthy if it were to separate from Spain.

“It is very viable,” said Artur Mas, the Catalan president, in an interview with the Guardian. “What is not viable is the current situation.”

The Catalan separatist campaign will come to a head this weekend in an election that will in effect serve as a plebiscite on the region’s future in Spain.

Whether you believe in Catalan viability on its own depends on whether corporations will punish the region for seeking independence, and whether they would flee the region in droves. The European Union has intimated that they would not accept an independent Catalonia as a member. It also raises the prospect of civil wars, not unfamiliar to Spain, though this war could end up being economic rather than military. In addition, Spain has always been an uneasy alliance of various factions, and the others, like the Basque for example, would in all likelihood not simply react to Catalan independence with a sniff, and would instead seek an independence of their own. The collapse of the Spanish state could be a potential outcome.

Much hinges on the upcoming elections. It is unclear whether the Convergence and Union Party will muster enough support to truly push for independence. But I would say that this is the type of instability that necessarily results from failing to fix the economy and burdening citizens with the brunt of the pain. They quite rationally look for alternative solutions.